MEEKER, COLO. - What if you could make more money by throwing coal away than actually using it to heat and electrify our homes and businesses? How would you do it?

You might make a handsome profit by playing one commodity against another, particularly if you don't have to go to a competitive bid to pay for one of the mineral resources.

Say oil goes back to $80 to $100 per barrel, and coal stays on its steady course of $12 to $15 per ton. Under this price scenario, you might be able to burn coal to generate the thousands of megawatts required to extract "oilshale" under a freeze-wall and heating regime, even if the energy value of the oil you extract doesn't match the energy you put into the program.

Would it be possible, then, to have a total net loss of energy and still make a profit because you leveraged $90 oil against $12 coal?

I asked whether there's a net energy loss in oilshale during a tour of Shell Exploration & Production's Mahogany Research Project in northwestern Colorado in September.

"We would not be doing this if there was not an energy balance. That would be stupid on our part," answered Jill Davis of community relations for Shell's "Unconventional Resources" division.

Davis said Shell will not disclose how much electricity will go into its Mahogany project.

Shell is poised to gain three tracts of federal oilshale, eight square miles each, under the federal government's incentive program, without competitively bidding for the resource. What Shell, and other potential oilshale developers, will end up paying to the federal government isn't known yet.

What is certain is that Shell is serious about developing oilshale, which isn't really oil or shale at all. It's rock infused with kerogen - a petroleum that Mother Nature hasn't cooked completely to turn into oil.

I actually laughed out loud when I first heard about how Shell intends to develop the "oilshale." They're going to use electricity to freeze a wall of ice 2,000 feet underground around a 15-acre area. Then, while that's frozen, they're going to use more electricity to heat up the rock within the perimeter of the "freeze wall" to about 650 degrees Fahrenheit. Wait four years and the kerogen flows out of the rock and up a series of wells.

I stopped laughing when I saw the fleets of drilling crews busily at work, and a huge industrial complex beginning to form. It's no joke. You can doubt whether it works, I thought, but you can't doubt whether Shell is serious about doing it.

"This is like the Wright Brothers verses the Space Shuttle," Davis said. "With our process we can make great oil - fine, high-grade fuel. Our process works. The question is, can we do this in a sustainable way?"

If you want to find out more about Shell's Mahogany project, search Shell's Web site, www.shell.com.

Energy reporter Dustin Bleizeffer can be reached at (307) 682-3388 or dustin.bleizeffercasperstartribune.net.